What are Sales Finance Companies?

Sales Finance Companies

A Sales Finance company engages, whether by purchase, discount, pledge, loan, or otherwise, in the business of acquiring, investing in, or lending money or credit on the security of any interest in (1) installment sale agreements made between other parties; (2) retail credit accounts, made between other parties; or (3) secured home improvement transactions, made between other parties.

What Are Some Examples of Sales Finance Companies?

Examples of Sales Finance Companies include brokerage firms, central banks, and credit unions. These are generally institutions which customarily purchase at discount the credit instruments that are given to retail dealers by their installment-buying customers. These institutions are known variously as finance, credit, discount, trust, contract-purchasing or acceptance companies.

How Do I Obtain a Sales Finance Company License?

A Sales Finance Company License in Florida is a license issued by the Florida Office of Financial Regulation (OFR) that allows a business to engage in the business of making loans or sales finance agreements for the purpose of financing the sale of goods or services. This license is specifically for companies that provide merchant cash advances, which are short-term funding to businesses in exchange for a percentage of their future credit card sales.

To obtain a Sales Finance Company License in Florida, the company must meet certain requirements set by the OFR, such as having a surety bond and registering with the National Mortgage Licensing System (NMLS). The Sales Finance Company license is also subject to ongoing compliance and regulatory requirements, including regular financial reporting, regular audits, regular background checks and ongoing education of the employees. It is recommended to consult with the OFR for more detailed information about the requirements, application process, and regulations that apply to your specific business.

What Are the Requirements to Obtain a Sales Finance Company License in Florida?

To obtain a Sales Finance Company License in Florida, a business must meet certain requirements set by the Florida Office of Financial Regulation (OFR). These requirements include, but may not be limited to: (1) Financial stability; (2) surety bond; (3) NMLS registration; (4) background checks; (5) compliance with state and federal laws; (6) disclosure and advertising; and (7) business plan.

Financial stability means that the business must be financially stable and able to meet its ongoing obligations. The surety bond requirement means that the business must obtain a surety bond in the amount of at least $100,000. All individuals with an ownership or control interest in the business must submit to a background check in order to comply with Florida law; part of this compliance includes consumer protection laws at both state and federal levels and registering with the NMLS. The company must provide accurate and complete disclosures to potential customers and follow regulations on advertising their services. The company must have a business plan that demonstrates the ability to conduct business in a manner that complies with the requirements of the Sales Finance Company License.

It is important to note that these are general requirements and the OFR may impose additional requirements depending on the specific circumstances of the business. It is recommended to consult with the OFR for detailed information about the requirements, application process, and regulations that apply to your specific business.

EPGD Business Law is located in beautiful Coral Gables. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Silvino Diaz

Silvino E. Diaz’s practice ranges from Civil and Commercial Litigation to Entertainment and Intellectual Property Law. Silvino has earned a reputation as one of Puerto Rico’s foremost advocates for independent musicians and artists. As a result of his sustained commitment to creative industries, he was named Professor of Intellectual Property Law at Atlantic University College (Guaynabo, PR) – the Caribbean’s leading digital arts institution – where he spearheaded the “Introduction to IP” course for both the graduate and undergraduate programs, and was appointed by the Office of the President to develop an Intellectual Property graduate curriculum, where he served until moving to Miami in 2017. He is the founder of the service known as Starving Artists, where he offers innovative business and legal counsel for artists and creatives.

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